Amazon Bridges Troubled Waters

Amazon(AMZN Quote) heads into its fourth-quarter earnings Thursday on a roll: It was a record season for online shopping, and Amazon is one of the best-performing Internet stocks since it last announced earnings.

Shares of Amazon have risen 11.5% after its October earnings, outpacing all large-cap Internet stocks except Yahoo!(YHOO Quote) and InterActiveCorp(IACI Quote) in the three-month period.

In addition, Amazon's gains have nearly doubled that of the Nasdaq Composite.

The stock has also breezed passed its summer 2006 trading level of $34 right before disappointing second-quarter earnings sent it nose-diving to $26. Shares of the company closed Wednesday's regular session up 62 cents to $37.67.

The online retailer's newfound hope stems from the belief that things are going according to plan -- even though that plan isn't exactly the one the Street has been recommending.

Analysts expect the retail giant's revenue to continue its impressive increases, even though Amazon keeps shrugging off their calls to rein in discount offers and investments in favor of raising margins.

For the December quarter, analysts surveyed by Thomson First Call expect Amazon to report earnings of 21 cents a share on revenue of $3.78 billion. That would amount to a jump in revenue of nearly 27% from the same quarter a year ago.

Analysts expect full-year earnings of 43 cents on revenue of $10.49 billion -- a gain of 19% from an already large revenue number.

But new incentives in the online shoe and handbag markets is the latest sign that Amazon, which continues to offer sizable discounts such as free overnight shipping for select items, has little intention of curbing measures to keep boosting revenue.